Clawback from prop #104

Hub Proposals Proposal Ideas
1

I would like to open a discussion to propose executing (or re-executing) the clawback of unvested ATOM allocated under Prop #104 to Notional, as already signaled by Prop #860 in order to return all remaining unvested funds to the Community Pool.

Based on current on-chain data, over 40,000 ATOM should still be recovered.

Background

Prop #104 (March 2023) – “Fund Notional to work on the Cosmos Hub”

Allocated 120,000 ATOM over 3 years (40k/year) through a continuous vesting account.

The text explicitly stated that the community could claw back unvested funds if the grantee failed to deliver or lost community confidence.

Prop #860 (Dec 2023) – “Claw back unvested funds from Proposal 104” (signaling)

Passed as a signaling proposal asking to return all unvested ATOM from the #104 vesting account back to the Community Pool, following organizational changes (3 out of 5 multisig signers left, etc.).

The vesting address was specified as:

cosmos145hytrc49m0hn6fphp8d5h4xspwkawcuzmx498

Gaia v15 Upgrade (Feb 2024) – Prop #885

Official communication at the time mentioned that v15 included execution of the clawback handler for the unvested funds from Prop #104 (per #860’s signal).

However, on-chain data suggests not all funds were reclaimed, and a significant amount (~40k ATOM) remains in that vesting account.

Current situation

The beneficiary entity did not fulfill its commitments or is no longer able to do so (as already discussed in the #860 thread).

Despite the signaling vote and the upgrade handler, there appears to be a remaining unvested balance (>40,000 ATOM) that should be returned to the Community Pool.

Leaving these funds idle in a vesting account undermines the governance decision already expressed by the community.

Proposal

1. Mandate Gaia maintainers (or the Cosmos Hub team) to execute or complete a clawback from the vesting account

cosmos145hytrc49m0hn6fphp8d5h4xspwkawcuzmx498

with:

  • a clear snapshot height (to calculate unvested amount)

  • exact amount to be clawed back (subtracting any already-transferred portion)

  • destination: the Cosmos Hub Community Pool.

2. Publish a transparency report summarizing:

  • Total ATOM allocated under Prop #104

  • Amount vested so far

  • Amount already clawed back

  • Remaining balance,

  • Activities or deliverables achieved vs. proposed.

3. Include the clawback in the next network upgrade or as a parameter change proposal, with a clear execution plan (block height, code path, and testnet verification).

4. Add a generic clawback framework for future Community Pool grants to ensure such clawbacks can be easily triggered when milestones are unmet.

Why this matters

The community already signaled its intent to reclaim unspent funds via Prop #860.

Public funds from the Community Pool should be either used for productive work or returned when not delivered.

The clawback mechanism is part of responsible governance and treasury management.

Completing this process will close the loop on Prop #104 and restore those ATOM to the Hub’s treasury for new initiatives.

Call for contributions

Gaia developers to confirm the technical feasibility (clawback handler, snapshot height, module call).

Data providers / explorers to verify the current balance of the vesting account (vested vs. unvested, transfers executed).

Validators to comment on upgrade timing, operational implications, and testnet readiness.

References

Prop #104 – Notional funding (120k ATOM, vesting 3 years, clawback clause).

Prop #860 – Signaling proposal to claw back unvested funds (vesting account, multisig context).

Gaia v15 – Included the initial clawback handler for Prop #104 (possible incomplete execution).

@Cosmos_Nanny @Mag

5 Likes
2

Can you clarify what these items mean?

3. Include the clawback in the next network upgrade or as a parameter change proposal, with a clear execution plan (block height, code path, and testnet verification).

Changing the balance of a wallet can’t be done via a parameter change proposal - I don’t understand what this means.

4. Add a generic clawback framework for future Community Pool grants to ensure such clawbacks can be easily triggered when milestones are unmet.

This seems way beyond the scope of what #860 intended to accomplish. It is a much larger and more discussion-heavy piece of work (R&D, community approval of the spec, dev work, testing a new feature, implementation) than executing a single clawback. I’d recommend striking this and putting it into its own proposal.

Though…the current ‘generic framework’ in my mind is to have a Community Pool prop fund a DAODAO contract with a supervisory council who can send the cash back to the pool if performance isn’t adequate. That’s what people usually do and so far it has worked fine. I don’t think it’s broken enough to incur dev work building out a bespoke solution.

3

Thanks for your thoughtful feedback, @lexa totally fair points.

On point #3 (“Include the clawback in the next network upgrade or as a parameter change…”)

I want to apologize if my earlier wording was not technically accurate, I’m not a technical, so I probably used the wrong terms.

The idea behind this point is actually very simple: to recover the unvested funds from Notional, since they did not fulfill their obligations under the community-funded mandate.

You’re absolutely right, a ParamChange by itself cannot modify account balances.

The intention was to outline a clear path for executing the clawback, depending on what’s technically supported by the Hub.

So yes, mentioning “parameter change” was misleading, it should be removed and replaced with a clearer, technically valid description.

And of course, everything would need to be tested publicly on a testnet before any on-chain execution.

On point #4

No need to go deeper into that one, it’s outside the scope of this proposal.

4

I just know that the window to claim these funds is closing, and if I remember correctly, it ends around March-April 2026. 40k atoms is a significant amount. My opinion is that it’s important to bring these funds back into the CP.

1 Like
5

Understood, thanks for clarifying.

Technically, it would need to be included in a software upgrade prop since this is a state migration (changing the balance of Notional’s account balance and/or the Community Pool balance).

However - I did a bit more fact-finding here since my team would be responsible for implementing this clawback. Here’s what I think has happened:

  • Proposal 860 (2023-Dec-20) signalled community approval to reclaim unvested funds in the multisig. At the time of the proposal, this was just over 90k ATOM.
    • Further context is available on the forum here. It’s quite the read.
  • Proposal 885 (2024-Mar-15) upgraded Gaia to v15.0.0 and included the migration described in Proposal 860.
  • This post suggests that v15 didn’t properly execute on what Proposal 860 dictated, since the multisig wallet still has 46,691 ATOM in it. Proposal 860 very clearly states that a clawback of vested funds (totally ~30k ATOM) is not within its scope.
  • v15’s clawback method involved an automated action to transfer the entirety of the unvested ATOM balance from the wallet to the Community Pool. At the time that Proposal 860 passed, there were around 90k unvested ATOM. By the time v15 took place, I think that number had dropped to around 73k, and all of that was returned to the Community Pool during the migration.

So the question for me is: Is it worth it to do another clawback migration to reclaim ~17k ATOM to the community pool, given that the individuals involved in this multisig are likely never going to coordinate with each other again coherently (given the details of how Notional fell apart)?

I don’t really think so. Gov can have a different opinion if it comes to a vote, but I don’t think 17k ATOM locked up in a multisig is worth the effort. It’s not like the Community Pool is low on funds.

6

If we decide that 17,000 ATOM aren’t worth doing anything with, well, personally, I’d definitely know what to do with them :grinning_face_with_smiling_eyes: maybe a proposal to send them to my wallet? (Just kidding, of course!)

7

Like I said, gov can have a different opinion! This one’s just mine :slight_smile:

It’s more like…I think it would be worthwhile to rally all the validators to vote if it meant keeping 17k ATOM away from bad actors. But is it worthwhile to send it back to the CP instead of leaving it essentially unreachable in a multisig with people who likely are (likely) never going to cooperate to free it? Probably not. Imo, that money is basically burned and I’m fine with that.

Unless we’re trying to afford something crazy expensive that takes the entire Community Pool and we’re short 17k ATOM, it seems like returning that money to the CP would just be a drop in the bucket in terms of the spending power of the community.

1 Like
8

Okay, I hadn’t fully understood before, but if you can assure me that these funds will remain inaccessible, then I’m fine with that. The idea isn’t necessarily to recover them (even though that could have slightly increased purchasing power in the future); it’s mainly about involving the law and holding bad actors accountable. You understand me correctly. In that case, I agree with you.